Broadband Internet access will be available from every one of BT's local telephone exchanges in Scotland by the end of 2005, thanks to a multi-million pound subsidy provided by the Scottish Executive.
Broadband is currently available to 96 percent of the UK's homes and businesses, with many of the unlucky four percent located in remote areas such as rural Scotland, where it has not been economically viable to upgrade the local exchanges.
Faced with this problem, the Executive is paying over £16m to BT in a five-year tender — announced on Monday — that will see 378 local exchanges ADSL-enabled before 2005 is out.
A similar multi-million pound contract has just brought universal broadband coverage to Northern Ireland.
Announcing the contract, enterprise minister Jim Wallace said that the Executive is stepping in to help provide the 'vital technology' in areas where the commercial market has failed to deliver the broadband services which small businesses and consumers have been crying out for.
"We cannot allow remote and rural communities to fall behind simply because they cannot access this vital technology that can make a positive difference to many aspects of our lives" said Wallace.
BT has previously said it is aiming to make broadband available to 99.6 of the population by the end of July this year. Upgrading all of Scotland's local exchanges will push coverage to 99.86 percent — leaving just 110 local-exchange areas in the UK without ADSL.
Although Monday's announcement is good news for broadband have-nots north of the border, they may still find that they remain second-class citizens in Broadband Britain. Thirty percent of the 378 local exchanges have been upgraded with a product called ADSL Exchange Activate, which will only offer top speeds of 512Kbps, versus the 2Mbps that is now a standard maximum over BT's ADSL network.
Some people will also find that they can't get broadband even though their exchange has been upgraded, as they live too far from their local exchanges for ADSL to work. Others will find that their line length means they can only get relatively slow broadband services.
BT, though, is adamant that Monday's news is a big step forward.
"Most people should be able to get at least 512Kbps. It's about getting a foot on the broadband ladder," said a BT spokesman, who described the upgrading of the 387 exchanges as "the final piece of the jigsaw" for Scotland.
BT is understood to be spending an additional £16m, on top of the Executive's contribution, to upgrade the exchanges. Once this is achieved, the telco plans to work on boosting broadband take-up in Scotland.